Freeze on Public Sector Employees’ Salaries - May 7, 2011

The government is planning to freeze salaries of government employees for a period of at least one year, keeping in view the current financial position.

The government is planning to freeze salaries of government employees for a period of at least one year, keeping in view the current financial position. The economic team has devised two taxation plans where the first (Plan A) requires implementation of Reformed General Sales Tax while the other plan (Plan B), employed in case of inability to implement Plan A (i.e. RGST), would withdraw all the tax exemptions and subsidies. Federal Government had increased salaries for public sector employees by 50% last year (although this is only 50% of the basic pay and ad-hoc measure which can be withdrawn at any moment, pls see http://finance.gov.pk/fb_2010_11.html. However this measure has been criticized by provinces as they are adversely affected by this move.

Source: Dawn May 7, 2011 - Freeze on salaries likely in budget

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